The Huddle - Episode 5 - Handling Finances and What to do With Your Earnings
This week Paul talks with Jose and Daniel Gonzalez from Preferred Flooring discuss how to be smart with your money to set yourself up for success in your business. They touch on saving for taxes, investing in yourself, and investing in your business to continue to grow.
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The HUDDLE is where the flooring industry can get together and talk about everything! Lead by Paul Stuart from Go Carerra who is joined by Daniel and Jose Gonzalez from Preferred Flooring.
what's up guys and welcome to the huddle
we come at you every week to discuss how
to maintain forward progress in your
flooring career
this applies to flooring but also
plenty of other careers
today we're going to be talking about
you know handling your finances and what
to do with the money that you earn
um
and kind of
just best practices for
for uh where to reinvest that money
and what we have found through
my 20 some years of of
being in the flooring business and a lot
of mistakes i made and a lot of uh
lessons learned
and uh got daniel and jose with me as
usual and they're gonna share some of
their
you know experience and and um
uh you know their their journey as well
we'll have time at the end here uh for
some q a so if you have any questions
type them uh type them in the chat
and uh we'll do our best to answer those
at the end
so as usual guys how's how's the week
starting for you
uh
busy
i think i think we've kind of hit a
bottleneck right now you know with
everything's kind of
the end of every month everything's just
kind of
going together just like that
yeah and summer's here so
if you're in schools uh you're you're
getting
getting that work trying to get that
work done
and uh
it's it's really encouraging just to
note to everybody that
i looked at the architects um we had an
event at one of my facilities here in
wichita
last week
and
talking to some architects and
their uh the reporting they get looks
like
uh it it kind of echoes what
was said at surfaces this year
which is
architectural billings are
significantly up all the way through and
and
look to be uh staying up all the way
through
2023 uh
with all the talk of recessions and and
you know the the economy and all that
that for construction people is is a big
plus so hopefully that stands true that
being said gentlemen
handling your finances i i took a few
notes and wrote down a few things that
um
i think we were discussing before this
may seem a little elementary sometimes
but had i been told some of this stuff
when i first got started i think it
could have well i know for a fact it
would have helped me a lot so
starting off uh
you you start earning money and you you
get some cash flow going what do you do
with that money right
invest that money in yourself
first you can't be the leader of a
company or an uh
you know other employees and things like
that if you're not the person that can
you know
currently if you're not the person that
can be that guy you have to become that
guy that only happens through education
um a lot of personal development um so
you know
i won't tell you what genre or whatever
but there's
you know read books
take courses learn
um
so
i i believe heavily that you have to
become the person you want to be
uh to do the things you want to do
and so you know if you want to be a
star
you know track runner you're not going
to just magically
it's not just magically going to happen
you have to put in the work the training
the learning
and when you get real good you start to
learn these little techniques that make
you faster just
from
uh you know your form and things like
that so
not that i'm a track expert but that's
uh
that's that's the best technology i
could come up with off the top of my
head
uh number two
and
you know you guys could probably speak
to this as good as anybody uh and
probably better than most is your
equipment and tools you know how how
how can those items how do the how do
you see those items like
benefiting why is why would you say
that's so important
uh it promotes efficiency man like
you don't have the right equipment
then it's gonna take you two places long
you know and you know when we started
out um we just talked about this here is
um the d cup as simple as it is and and
to put it in perspective is
the very first time that i've ever seen
millwork base and i was responsible for
doing it you know i had zero knowledge
on it and we went out and i'll never
forget the places called uh
marshall manor went out there with a
utility knife
with zero clue and right on the box we
showed the miter saw
and uh the gentleman on site had this
nice expensive finished carpenter miter
saw and he would not let me use it
we didn't have it and we had a knife
everything didn't look good yeah at the
time it probably did for what i could do
with the knife but
once we got a miter saw it made it so
much easier and then all of a sudden
this d cut comes out
and we have to clean up and i can drag
it around and you can show anybody how
to use it so
and you didn't need power
yeah correct you didn't need power and
you weren't cleaning up the mast you
weren't putting plastic up a wall where
you were cutting to protect uh you know
some some wallpaper that had texture to
it
they're just
having the right stuff and the right
tools uh
goes alongside with the right education
how to use that tool
man does it speed things up where did
you see the d cutter first
i don't know i don't even know i think
daniel just had mentioned something
about d-cut uh we probably went to like
an open house
and seen it and we probably dismissed it
like oh no wait that's no way and then
the demonstration was like
really
so i seen it at a show
i can't remember what show it was but
i've seen it at a show first
so
like go to open houses and go to shows
if you can make it
that's where you're going to see the
most innovative stuff
i one of the things
that i can think of is
the um
the welder
leicester came out with the
the 90 degree angle uh tip
that little thing
turned out i bought it at a show
it turned out to be
absolutely
wonderful it was a great buy
i was heat welded in some flash cove
yesterday and the the toe kick was only
about i don't know it was less than four
inches off the ground i think so i
didn't have that the little gun as well
as that 90-degree tip
yeah getting under cabinets
yeah getting under cabinets in a uh
medical facility you know
sometimes those toe kicks are in farther
than normal
and i tell you what it's come in super
handy my point is just
like keep your mind open for tools if
you can make it to some shows or open
houses or get into your distributor and
asking them what's new
it's it can save a ton of time right
right tell me you know uh investing in
the tools like
simple back to the knee pads
invest in a good pair of knee pads save
your knees for a long time i didn't wear
knee pads to the point where
it looked like i had two knee caps
and i thought that was normal no i'm and
then you you invest into some knee pads
and then you're like man my knees and my
back don't have to feel as bad as they
have been
if you're early on in the career and you
see someone with knee pads
just ask them like even if you think
you're against it just ask them because
long term holy smokes
same thing with a
polish my first six seven years i didn't
carry a punch i put in my back pocket
you know put knives in my bag pocket or
lose tools here leave them
in a classroom down the hall around the
corner do you ever cut yourself
oh yeah cut the bottom of my butt cheek
a few times yeah
cut a hole in the pocket and the carpet
blade would fall through and cut my cab
when i was walking
i'm like oh man guys it's time to switch
pockets i wish i had a leather pouch i
could stick this thing in and that would
have been great right
how convenient so just yeah so i mean
not only will
uh invest in an equipment make you
faster and more efficient it will save
your butt cheeks
yes apparently
uh so
the the next one you guys
you know have invested in your employees
um i believe that's
up there on the list uh investing
from a training perspective um
but you know
the end of the day it's it's caring
uh about them caring about them um
you know
trying to help them succeed
uh advancement opportunities and
and how can you
um
you know
for us it's it's like several years ago
it's been probably five years ago
we started offering full
health insurance paid by the company for
all uh installers and that work for our
company by the hour that are employee
installers um company-wide that
you know we invested in that a half
decade ago or whatever um so investing
in your employees you know
will create loyalty but also
you know we want the best life form that
we can
you know
help them to achieve we can't force
anybody to achieve but
setting setting them up for success as
best as we know how and
listening and hopefully having some open
dialogue so your employees obviously
having good employees that can perform
the duties that you need them to do
whether it's install or in the office an
admin um those are good places to put
your money as well
it's hard not to right because yeah
if you have a bus and you're the driver
but you don't have any wheels you know
you kind of got to find the right team
to help you maintain that vehicle to get
from point a to point b and
um if you're not willing to
put some kind of uh investment towards
your employees i i highly doubt that
they're going to stick around for you
and on the other hand
um
individuals entrepreneurs uh gentlemen
working for themselves and maybe making
a transition from uh
self-employed to employee there there's
there is a difference right like
when we made the transition
it was
a different mindset um we were still
thinking
like we were self-employed and we're
treating the whole thing like we were
self-employed but once we started
transitioning we started thinking
uh
more employee classification and then
everything else that came along with it
um
it started opening up our eyes to to a
couple of different uh avenues that we
weren't taking
um but we did have the luxury of working
with a company who did
classify us as employees and they did
have benefits and you know and you know
can't say that we have original ideas
but it was great to be able to work with
a company like that to
to give us some ideas you can take away
the things you do like
um from situations like that kind of
play what what what was your
what did you guys
when you first started out on your own
you had helper
or a couple helpers or or whatever what
what did investing in your employees at
that time look like what was that
your new gut your your new
company you're going out you got an
installation business
you're going to start subbing through
shops maybe
you know grabbing some work direct
what is your what was your what did it
look like for you guys to invest in
employees at that time
i think it was more of a thank me in my
check type mentality hey thanks man for
doing a great job really thank me in my
check you know i mean so it was more
um just adding additional funds to
their
their check or or
um early on it was a lot of uh
giving them rides to picking them up
from their houses and stuff like that
you take what you can get
so it was working with uh working with
them to
help them be successful in one way or
another whether it's getting them to the
job or or um which i'm sure everybody on
this call
um both
us and anyone watching that's in
flooring can probably relate to going
and
waking up an installer to get them in
the truck and get them in the job so
hopefully uh you know that climate
changes a little bit um
you know my hope is that
the installation community starts to
really take some steps forward here to
get themselves trained to to um utilize
the
the the
you know tools at their disposal to
to get trained
uh and start caring about
your career not just about getting a
check at the end of the week
a check is great that's how we prove
that we we we have given somebody value
is the money but really the goal has to
be something
a little different maybe bigger
which is being the best that you can be
at whatever you chose to to be in i mean
the fact is you're in flooring you chose
it i know a lot of us believe that
boring
[Laughter]
you know a lot of a lot of the people
that we've met along our journey
um
are
in the trade they would stay by accident
right now flooring chose us
um
but those guys have been in it for a lot
longer than we had and
yeah they made some good decisions early
on and
i can't say that we're not taking the
advice from them because anytime we're
sitting there and learning even from you
you know we take advice from you as well
because you've already been through it
you've been through something we haven't
and uh yeah it's just nice
so uh we
we've got
yourself your tools and equipment your
employees i put savings
next like
at some point you have to start
socking a little away you got to start
putting a little bit of money away
um there's other way you know i know
you know financial advisor but i can
tell you saving you know close to 10
percent of your your money each week can
come in real handy during a market
downturn or a few weeks of
of a job canceling on you or whatever so
you know for your own well-being as well
as your families
i honestly believe savings is a piece
that
nobody really likes to save money
i mean we like we really enjoy spending
money but
how much do we like to save money
um
i know that that can be a a
struggle but if you can make it
automatic 10 out of your check whatever
you earn go into savings uh
or somewhere around there that's been a
good practice i didn't honestly start
doing that until
it's kind of almost sad to say probably
10 years ago i was probably
32 or 35 before i really started putting
back
any significant amount of savings
i didn't have anybody tell me how
important it was
i could have
you know when i was making 600 bucks a
week i could have put 60 bucks a week
away
and um
but i didn't i didn't really understand
the importance of it
so if you on this call don't understand
the importance of it i'm just telling
you it it can change your life uh you
can really
um
you know
if it keeps going great and things are
going up and you don't have to tap into
your savings that's awesome now you have
a little nest egg that you can invest in
some manner uh give it a financial
advisor and start talking to them but
don't think that you can't go talk to a
financial advisor like that's another
big piece just go talk they're they're
free to talk to yeah they they all want
to give you that information for free
and then once you're to that point
you're like all right i can't do it by
myself
that's where they start making
their money yeah i'd challenge everybody
on the call go call a financial advisor
tomorrow just talk to them chat with
them
you know
i know the stock market and the economy
sucks right now especially equities and
and you know bond rates aren't great
aren't great either which is an anomaly
in our economy you know both are going
down right now
but
this is the time when you start
investing that things
you make your money in these downturns
you invest now
it has to go back up eventually
so
um
yeah so and that kind of flows right
into the next one which is investments
in in that case i'm not talking about
you know financial instruments as an
investment i'm talking about investing
back in your company and technology
or
more employees or more
you know we already talked about tools
and equipment but a little bit more like
that specialty equipment
that can make you some major money we
bought a demo machine probably it's been
eight or ten years ago tomatoes a ton
of money
and so
i know other installers that have made
that investment 40 grand or their about
investment into a right on demo machine
i know guys that you know they reach out
to me they're like all i want to do is
demo i'm like too bad
yeah
we need you to install steel
but
yeah it's a it's um
but what i mean
is you guys invested your time and
effort into technology to make your
communication better that's what go
career is all about is a piece of
technology that can help you run your
company and your installation labor
better and keep better track and and and
make sure you have the right talent on
the right job
but there's plenty of other software out
there
um
from different accounting systems to
project management systems we use a
product called structure which is
an accounting project management
software uh also we use slack for
interoffice communications to help keep
our email inboxes just for clients
and and things like that so we're not
emailing each other back and forth i
think there's 30 some employees in our
company right now
all those emails back and forth
it's you know we use slack to keep our
inbox clean
you guys use i believe microsoft teams
for a lot of stuff like that too i mean
there had to be an investment in time
and effort to put that together
that was it
yeah it's kind of something involving
just like you know anything in business
it's if it's not evolving that means
you're doing something wrong right
well you're not pushing the envelope
much if
in that case but yeah i agree
well that you know that's that's where
the progression here is you start off as
an installer you start with tools you
start with
and then your first employees and now
you're investing in technologies that
will help your company grow
maybe you got an office manager or
somebody an assistant of some sort
that's helping you and you need
communications
pieces um
so just keep your mind open the real
thing here is
uh one of our core values at stuart
associates is to stay innovative that
we're we want to be on the forefront of
technology and
things that are going to make our
company and our employees more
productive
that's a constant search there's always
new stuff coming out there's always new
things to do
it's a constant search to find the items
that match what your need is
um and
you know i encourage everybody to
you know stay on the
stay on the forefront keep your mind
open um for different things that can
make you better
right and it's it's a mindset switch too
right because when we started it was
always
well
i can't afford this i can't afford to
classify these guys as employees i can't
afford this piece of software
and then yeah we can't afford this
diamond machine
and then it gets to a point where you're
like
i can't afford not to do this yeah
you know it's funny yeah i can't afford
it i remember so this i'm gonna go way
back when we started and we were excited
but when we bought our first welder
uh he welder like
that was expensive to us i think we
spent just over four grand or something
right around four grand and we didn't
really have anything we didn't have any
employees yet
i remember we bought it because i was
like if we don't have it
i can't go after that work like i can't
get the work i'm gonna say now we need
this because now we gotta wait because i
need to get these tools it was like
put it in your pocket put it in your
tool box and then say yes we can do that
but uh we we bought it and the first
thing that we went did was a three foot
repair seam
over at a hospital was a saddle in the
doorway um both of us went we both went
we were excited let's check it out
huge profits yeah yeah yeah um
but
it's just
yeah it's nerve-wracking man it is man
and and
you don't see
the light at the end of the tunnel
until you start getting that vehicle in
motion again right so that's the idea
that's why it's an investment right
that's the idea of investing is delaying
your gratification for that whatever
you're investing in so
that's whether it's money or a tool
you know a lot of people buy something
just like you that
it maybe not pay for itself next week
now i got a great story about my demo
machine i did pay for it in one week by
landing a big job
i was i remember like yesterday i was on
vacation in the bahamas and i called my
rep and i'm like i need that machine
delivered tomorrow
so i was in the situation you're talking
about
avoiding and i had to pay extra
it was a nightmare but we did get the
job done
it went really really well
and it basically that one job paid for
that machine
so there's opportunities out there to
keep your mind open for that stuff too
if you're willing to invest that money
in fact our batteries just went out
on that machine cost six thousand
dollars for new batteries
i know
yeah
but i'll tell you this
we are lost without that piece of
equipment
we have guys we use it so much like
to tear it by hand we have like
you should tear this up by hand well
yeah four inch strips or a ford scraper
or two inch trips
no way i would quit yeah we know
yes you would
yeah that's why we have two of them now
too is if one goes down
we still got that that back up yeah i
need to get another you guys are ahead
of me on that
it's crazy like just i need the plan b
job sites sometimes just the amount of
work that can be done
yeah well and you do you know that kind
of goes back to some previous uh
huddles we've had
it does add to your professionalism you
pull that sucker up
in a trailer and you pull that thing off
people are like
these guys know what they're doing
or you got 10 guys with
with clamp pullers and
you know spud hoes trying to tear stuff
up or we just call them idiot sticks
that weighted
you know
spades that you'd use to
tear up vct back in the day
well so last i have uh i put it last
because it's the
the the one that i think probably
uh turns people off the most but it
really probably should be number one and
that's taxes
i cannot tell you how many stories i've
heard
of installation companies going under or
coming to me for a hourly job because
they didn't pay their taxes
they didn't track them they they didn't
have
a way to keep up with what they were
earning so that they kind of had an idea
on what to save
back or pull back for taxes and this is
separate from your savings
you know
if you're doing well
as an install company you're going to be
i mean get with a an accountant that's
another thing they are cheap when it
comes to
let's call it a life cycle costs like
yeah they're expensive by the hour but
when you need them by for that hour
they're cheap
so
get yourself set up correctly
and make sure you're you're pulling you
know you have your account helping you
understand how much you need to keep
back on taxes and make your
make your uh you know your quarterly
payments or whatever
however you you guys want to do that
that's
up to each individual person or each
individual company but i would tell you
if you are not keeping track of that and
making it a priority i didn't early on i
got in tax trouble
bad tax trouble i was able to pull
myself out of it but
i know i've i've sat with you guys and
talked in the past i know you've had
your problems so this isn't something
that
a few it's almost like every installer
i've ever talked to almost has either
major tax problems currently or
or has had them in the past
i haven't been
you had them in the past
listen
listen everybody
pay your taxes
find a way
to charge more money take some of the
techniques we talked about before about
making more money
increasing your your your value to the
industry so that then you can demand
more
and
by all means you know
a good place to start is around 25
you could be all the way up to 35
you know i think the top tax rates like
39
so i guess you could get all the way to
that level
you have to know kind of where you're at
but if if at the very least you're doing
25
get with your accountant make sure you
got your deductions you're taking
advantage of all the tax code that's
there for you to take advantage of
and then after that
maybe you're less than 25
but
at the end of the day if it ends up at
30 or 35 you're almost there you don't
have a huge tax bill
so this goes back to the whole software
thing too because you can keep track of
that stuff for your account to actually
let you know this is how much you should
be keeping
you know back because without if you
just got a shoe box full of receipts
that you turn in at the end of the year
you don't you're not
yeah
well
a number but is it accurate who knows
unless you buy it
that was me
and that's a benefit of
working you know for example in go
carrera is you have reporting on the
back side of that that at least allows
you to understand it's not an accounting
system but it at least allows you to
understand what you've
uh billed and what you've been paid and
you can track that in your in your
in the the payments account everything
so at the very least you know what your
revenue is
and
um you know in the future we're going to
give some ability to track expenses so a
very low level
um
type of accounting but if you're just
you or two guys and a helper or
something it will suffice and really
help you keep track of where you're at
as you get more sophisticated and you
need to have a full on accounting system
like
quickbooks or something i know a lot of
companies use quickbooks i know i
believe you guys do don't you we use
quickbooks yep yeah and and
that's come a long way so
yeah you're right daniel 100
like use you're gonna have to invest in
technology to be able to
um
you know accurately track
where you're at both from an expense
deductions all that kind of stuff all
your shoe box full
of receipts if i could go back in time
if i go back in time and do it all over
again from day one even if it was just
me and daniel starting out
we should definitely just just have that
just in case because you don't want to
wait till you need it then learn how to
use it right you want to make sure that
you understand the inner workings of it
so that way as you grow
your knowledge grows with it and you're
able to make those adjustments because
uh
even if you're a sole proprietor one
individual like
make it easy on yourself man that's a
super easy investment
yeah i mean
that's again that's what an investment
is is putting something into something
before you need it a lot of times
um
or are you not necessarily like i did
the demo machine
or you can spend all that time at the
beginning of every year trying to get
everything together and you know two
weeks into trying to consolidate all
your paperwork and your receipts when
you could have spent two weeks uh
finding more work or two weeks working
on a project
um you know you'll save yourself a lot
of headache that it's definitely worth
it
yeah
yeah so
i mean
that that's the
the six biggest items i
i have on my list um
and you guys had a lot of the same stuff
it sounds like
i think that
one really important thing to understand
is don't spend all the money that you
make
yeah there's plenty of places to invest
it that'll make you more successful
long-term
help your image help you earn more money
be more efficient
all these things are really important
when you're running a company
and
the last thing i'll say is that there's
so many installer
uh companies out there installation
companies
that do not operate as companies that
that do not even view themselves as a
company
if you're even if you're a sole
proprietor
you can be a company you are the company
at that point but
you have to operate like one again
that's an investment if you're if it's
just you and you you plan on growing
your installation business to
40 guys and being a super sub for
you know medical facilities or whatever
your goal is
you have to start operating as such
don't don't wait until you have to do it
to do it
you know do it ahead of we did
yeah like we did don't do what we did
we're trying to help
trying to tell you guys
the stuff we did wrong
so
well let me
let me uh what's your guys is you guys
got anything else say before we open it
up for questions
no all i was gonna say was uh
uh you learn more about it by other
people's mistakes and your mistakes than
you do by all your successes so
um
you know it doesn't happen overnight and
it doesn't happen on accident
people don't see the failures behind the
success they just see the success so
just know that that's one thing that i i
like to say is you got to stop saying
that i can't afford it and you got to
start changing your mindset and saying i
can't afford not to do something
because it's like you said it's an
investment and it's just going to grow
from from wherever you're at now
yep
yeah it's a
it's a um
it's an interesting dichotomy on what to
do with money because money is like
fire if it's in your pocket so if you
don't get it reinvested to make more of
it um
you know you end up not having any
i've watched it for too many times so my
my
hope is that
any install companies out there that
are listening that you make sure you're
operating as a company that you you know
are
reaching out to accountants and getting
your deductions and and take advantage
of being a company
there's a lot of stuff out there that
you can learn
uh it's just a matter of investing that
time and effort so
let's move on to uh some questions
see what we got here
okay we had a question come in
um how do you recover or bounce back
from a year of not correctly handling
your money
it's hard
yeah it's hard to bounce back
but uh
really
that that saving is i think what kind of
saved us at one point because
we were
we were at least smart about one thing
is we got to put this money away
taxes and savings and then
once you figure out hey we're not doing
too hot and then you got to fall back on
that savings
and then you can kind of
take a look at the big picture and be
like all right this is what wasn't
working this is what has to change and
then you have that cushion in order to
be able to do that yeah and um if
they're referring to like uh textures
and all that um as far as uh falling
behind and not paying uh their estimate
or their quarterly
um
not a lot of people do what i did but i
called them said hey mr irs i think i
owe you some money um and they're like
yeah you're under the radar of course
and so i opened up that kind of worms
myself right but
well kudos
sorry to interrupt you but kudos because
that just keeps snowballing and
snowballing they're not to go away
yes i was i was definitely
there was a lot of years involved in
that right so
um
the way that i personally did it because
i didn't want it to affect anything else
that we were building or my or
uh my family my future um is is i made
phone calls and i i i made payment plans
with the irs i uh
i basically put myself out there you
know vulnerability right humility i said
hey i've made some mistakes i'd like to
correct them but i can't
afford to correct them right now today
what can we do
so that way i can start correcting it
right and um
you might not like what they have to say
but you know
they really want you to correct it so
they are more than willing to work with
you whether you do it on your own or
hire an attorney
um to help with some of those
corrections uh it's just a matter of
taking that initial step but just just
be ready to put yourself in a position
you're going to be uncomfortable for a
little bit
yeah
just to add to that
don't run
don't don't avoid
you'll find it head-on
they will find you
face it head-on and make a payment plan
uh
you know i went through it and
i
sincerely wish i would have had some
guidance and not went through it but i
did
and it's about making a payment plan and
then you make a little chunk of money on
a good job and you pay the sucker down
and you know you just chip away at it
the real
key is to not run
and face it and
jose just gave you a great example of
that call them like you know if you
haven't paid your taxes
i'm not saying you know how much to pay
but you know if you haven't filed in
three years or something
like go ahead and call them
i know a guy that
even though he did do that you know it
was a bit of a struggle
um but he's faced up to it and went
ahead at it and he's about there or he
is there
so those are
from a that's from a tax standpoint if
if you have a rough year like i'm
assuming that question was about taxes
um but
you know if you have a rough year where
you're not really
you know
making money it's it's time to back up
assess and address the problem
um
i'm
i encourage people to be warriors there
like it's gonna sometimes it gets tough
you gotta get up early and stay late
sometimes to make things happen and make
the money you need to make to be a
profitable business
and um sometimes you just gotta strap up
the boots and get after it
and we're in the age right now to where
there's groups out there and reach out
to someone ask a question
everyone
is more than willing to give information
we've all been through something so
yeah just posting a group hey this is
what i'm going through and then
like myself i've
there's been plenty of times where
you know because sometimes you go in
these groups and people just want to
be yes
with
comments that don't matter
so i just reach out through a message
and
and talk to them that way that way they
they know it's like i'm not
i don't want to deal with everything
that's going on but i just want to let
you know
this is what's going on this is what we
did stuff like that
yeah and it might not be relatable to
anybody right because you know
the direction that we went and we might
have taken the long way around compared
to some people who might have been able
to find a way to streamline some results
but
um you know that was the only
way for us at the time it was our only
path at that time and uh once we started
the path it would have taken us longer
to veer back
to start another one so we just
push forward
well the key sounds like it's
just that you pushed forward towards
resolution so
see what other questions we have here
okay there's another question
asking what would be the first step or
resource
that can be used to get ahead of them
for their financial responsibilities
to get ahead for their financial
responsibilities
yeah what would be their first step or
their first resource that they can use
talk to an accountant we already kind of
touched on that it wasn't until
like
our account actually helped us to
restructure the way that we were set up
so that way we
essentially save a bunch of money on
taxes
and
that money helped offset the cost of the
employees that we had
so
just you know
going to them and like i said he talked
to us for free before we were like all
right we're on board yeah they're they
yeah they want you to give your clients
right and he didn't he didn't put us in
the position to where he was
um
the deductions kind of were overbearing
it made us look like our annual income
was lower right because our net worth we
can you want to make sure that you are
doing it in a fashion
so you can still go qualify for a loan
uh your personal income versus your
business income if you go that route
um it's good enough to get the loans and
make your
net worth
um
enough to qualify for them and i mean
obviously credit scores involved but
that's another talk um
just understand what you're doing and
what your end goal is
um and then they'll lead you in that
direction then the other thing i would
say is to
it goes back to the software you know we
use quickbooks but there's plenty of
other things out there you can go using
excel spreadsheet or google docs you
know
but
tracking
what you're making and what you're
spending
so you have to know what's coming in and
what's going on because if you don't a
lot of things get lost in translation so
the more information that you track the
better off you are
in the long run to know
when something's going wrong
or
that that's really when something's
going wrong so that way you know all
right something has to change
ahead of time before it starts getting
too bad and it's never too early to
start that
no and then you're going to babysit
right yeah don't wait
to do it
like it's never too early to
start tracking what you make
and
um
what
what expenses you have and then what's
left over and talking to an accountant
so that you can reduce your taxable
income
uh is is important but i would say like
the probably the most elementary answer
to that is
what we've talked about in this call
save ten percent
put back 25 percent and and make your
quarterly or
some
uh standard
uh pay into
on taxes
uh and invest in
in equipment and tools that are going to
make you more money i would say what
we've talked about on this call is a
great spot to start
even if you don't talk to an accountant
if you track your expenses track your
income
save some money
and put back money for taxes
uh your your light years away ahead of
where i started and where what i'm what
i did for the first five or six years
right and that's where i you know that i
say it's baby stuff because
you just have to start getting in a
rhythm of
doing these things in order to keep on
doing them right you got to make it a
habit yeah and then once it becomes a
habit then then it's easier to go back
and be like okay now i need to track
this or now i need to break down
you know these costs per job and then
we're still not into not to a spot yet
to where we feel comfortable or we're
tracking enough stuff so
it's just continuously going and being
like all right once i get in the habit
of this i can go back and then start
tracking the next thing so that way
next year at this time i'll know where
i'm at with that
we'll just keep improving right
like you said
like do it
don't don't think that you have to wait
to you're going to be perfect at it to
start start
get better each year eventually you get
there we had a comment come across here
that that says uh contractors need to
understand their overhead first and
foremost
they need to know what it will cost to
live
you have to put all this together so you
can
know how to charge appropriately and
figure out your taxes
uh yeah for sure i mean overhead and
cost expenses
is important early on you may not have
much true overhead
uh when i started it was just me and a
and a helper
and
you know i started subbing when i
actually opened the company and we got a
little office now we got overhead and we
had to know what our expenses were and
when you get to that point
it's good to figure out what your
breakeven point is how much do you need
how much revenue at your regular
um
profit margin
how much revenue do you have to make to
break even now you have a goal of where
to break even
and then north of that
is profit
you know
we found that as we grew and got bigger
and bigger and bigger
our profit
uh timeline got farther and farther down
the year
it wasn't until the last quarter of the
year that we actually started to pull in
the profit for the entire year
up to that point even though we're
profitable we're we're making money
every month the bottom line is
you they're from a yearly basis you have
a a break-even point
and i would encourage anybody you know
know what your break-even point is and
then you kind of know where where you
need to drive north because at some
point if your overhead are somewhat
fixed
and you
you you increase your
um
your revenues versus that stagnant
overhead
that's when you hit profit so
any other questions
oh we got kyle
raise
well that was my my comment so um uh i
can't turn my video on if you want to
turn my video on i can uh you can see my
face but uh awesome
hey i don't disagree sir um so what i
was going to say is you were talking
about early on you didn't have a lot of
overhead and i i i slightly disagree
with that and i think it's overlooked
okay so
when i when i'm talking about overhead
your truck is your overhead your tools
are your overhead your trailers your
overhead the employee is is overhead
like there's way more expenses than what
people are are looking at in my opinion
especially if you do have an employee
right now you're adding in workman's
comp matching taxes
you have your general liability
you have any other insurances for your
your truck uh i put insurance on my
trailer i've got
insurance on my tools so all this stuff
starts adding up and it's more like i
think a lot of guys look at it they're
like okay well i need to make
75 000 a year and that breaks down to x
amount of dollars per day well that's
great except you forgot about the taxes
and everything else i want to be able to
buy a new 30 000
used truck every five years
so that's built into my overhead i'm not
paying for that out of my seventy five
thousand dollars that would be foolish
right because
it's a business the trucks it's the
businesses truck so it needs to pay for
the thirty 30 000 truck every every five
years i i have my tools on a on a
five-year replacement plan if i take
care of them can they last longer than
that
sure but
we have to know what it costs and then
that money's there so if i'm not reaping
again how did you go about that i i
completely agree uh how did you go about
um assessing that early on when you had
a ban and some tools or a truck and some
tools
and uh you you figured the replacement
costs for tooling and things like that
which is very
uh much a
um
overhead item that
you know typically comes a little later
but
certainly the vehicle and the tools and
such
uh that's pretty pretty uh cool idea to
think to put together a uh expense so to
speak
for a tool replacement
yeah how'd you go about that
so i'll be honest that i came up with it
maybe like a year ago
and it was just i have a knack for
numbers like i just early on i was asked
by somebody that i was in a bni group
with and they were like what's your
what's your like
break-even point for a day and i was
like ah it's like 500 bucks they're like
well how do you know i was like i just i
know
and so i went and sat down with my
bookkeeper and it turns out it was 500
bucks but that was
breaking dead even like taxes were
covered expenses were covered everything
and so
as i got better and i started charging
more um i really started looking at it
and i kept seeing people how do i what
do i charge what do i charge right in
all these different groups and so
i developed a spreadsheet and i was just
like okay folks i need help like what
are the expenses that it costs you to
run your business like start throwing
everything in the kitchen sink at me and
i i put together a comprehensive list on
a spreadsheet
and i figured out if it was an immediate
expense
then that comes out as a business
expense that year
if it's something like your tools or
your truck and you're having to save
that money up year over year then
there's a there's a column in it that
you can market as taxable because you're
going to pay taxes on that money sitting
there
and so
it takes into account you know
20 30 things and if you have things that
you need to add you can add them in if
you have a shop space you can put that
cost in if you have
um
multiple trailers or something you can
you can sit there and customize this to
it and it was just me thinking about
what does it actually take
to run a business because when you're
when you're talking with contractors
great artisans not always great at
business and a lot of things go
overlooked and i and really enjoy that
side of the of it and so i like trying
to put together these tools to help
further
other people to be more successful
there's no reason that
installers should be living paycheck to
paycheck no it's it's there's no excuse
in my mind whatsoever and this is a tool
to
push them forward let me caveat to that
is to say that you know as we've talked
in this discussion that it's never too
early to start
what i'm what i'm trying to
encourage people especially installers
who are getting going is
they may not have a truck
two trailers and all the tools
understanding your expenses should start
the day you decide to start
subcontracting or going out and doing
uh you know performing as a company
if you're doing that it's never too
early to start
tracking expenses
tracking revenue and understanding the
difference
you
have some years of experience to
fine-tune that stuff i've got 25 years
and we have
you know accountants that
we know exactly what we have to bill
every month to break even and anything
north of that is gravy baby right and we
understand those numbers but don't think
you have to get
you know become some big company or some
big you know even installation like you
have to do a million dollars a year in
installation to to to do this you need
to do it regardless of whether your your
your you're billing out 200 000 a year
or if you're billing out 10 million a
year you need to understand your
expenses versus revenue
100 if you don't understand what you're
bringing
to the table
and you don't understand where the
money's going then how do you know what
to bring in
you're just guessing at everything
and that's not you're not doing yourself
any
favors in that aspect you know right
it's actually saved us
to because i have a spreadsheet for
employee costs right and it's it's
actually saved us because it's like
why do you why do you guys have to
charge this much hourly well because
this employee costs this much and if i
don't charge you this much i'm pretty
much paying you to go work for you right
now that doesn't make any sense so it
just goes back to the the more you track
the more you know
yep
no i agree i don't think that's done
enough right i think doing time studies
is utterly important to a contracting
business just because
you get you know you go and you look at
a job you're like
that's 10 minutes that'll take an hour
that'll take 15 minutes and then you go
and do it and it was
five hours total
and you bid it one way and then it took
you a totally different amount of time
the numbers don't work
so yeah and it certainly gets more
sophisticated when you're doing
per job like if you're going out to a
project and bidding
you know a home or or someone
when when you don't when you're working
direct with whether it's the homeowner
or direct with gcs or things like that
it it it frankly the sophistication
that's needed at that point should go up
it's going to take um
you know more more
you have to start thinking about if
you're going to work with you know gcs
or or or something like that to pay
every 30 to 90 days you got to start
thinking about your your backlog and
your
you know cash on hand to be able to
finance that that work and that gets
really complicated because you're
talking about getting with banks for
lines of credit and all this kind of
thing
but
what is important i think is
that just getting the baseline when you
first start out if you baseline this
thing and your you track all your
expenses you track your revenue and you
know what your breakeven point is that's
a great starting point and just like
kyle's mentioned you can get and you
know daniel and jose
you you you increase your level of
sophistication with this as you grow but
don't wait
look that's the biggest thing i've seen
i've seen guys get you know
eight or ten guys underneath them and
they're they're pulling uh two million
three million dollars in in installation
only
and
they got way behind because they never
did any of this uh tracking never paying
their taxes didn't even know what it was
gonna cost
uh from a tax standpoint or what their
obligations were so
yeah great stuff kyle thanks for the
comments man i i think that's um
valuable input and at the end of the day
my encouragement to everybody is really
to get started right when you start your
business and don't wait till like i did
you know
four or five years later i'm trying to
figure everything out
i no thank you thank you for letting me
on i i appreciate it i i think you're
right
the earlier you start the the better off
you're going to be and you're talking
about some things that i know even
daniel and jose have have
going on and and they're looking at how
do we track
our expenses and and put you know figure
out cash flow for the next 30 60 90 days
and book projects around that and like
it you're right it's never too early to
start in that
you need to understand your business
that you you opened a business
and now you have to act like an actual
business owner you're not an installer
anymore you want to be an installer go
be somebody's employee because that's
the only time you're an installer in my
opinion i'll hire you
yeah
even if you're subcontracting you still
own a business and yeah so like it's
sorry you own a business you need to act
like you own one the store handing you a
work order doesn't mean
that you're just an installer that's not
how this works so correct it's all great
advice and that's where you know a quick
plug for go carrera the the fact is is
when you get a work order from a go
carrera company
there's a negotiate button there
use it if you need it use it negotiate
the work to what you think you can do
the job for
too many shops try to prescribe the cost
our our platform
has the
change order and negotiation features
for that reason is you are a company if
you're a sub if you have to make more
money now
who knows what shop we there's
you know several uh companies on the go
career platform but
so who knows whether or not you're
pricing yourself out or not but the fact
is if you have a good hammer rating a
good kudos score in the system you're
going to have more power to negotiate
and
you know make the money you need to make
from any shop
that being said guys thanks everybody
for joining us today we've ran out of
time i want to give a special thank you
to daniel and jose for joining us again
kyle thanks for your input we super
appreciate it and everybody who
had
questions uh
come back next tuesday we'll be um you
know i forget what is our
um
do you remember
i forget what our our uh topic is next
tuesday but join us at three o'clock
central time and uh we appreciate
everybody and i hope you got a little
bit of value out of this
so next week it's uh learning and
excelling
learning and excelling
we'll uh
further that one
a little further description by next
week so
yeah all right everybody thanks be on
the lookout for an email for next week's
um huddle
thanks for joining see you guys